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The number of powerful chips coming out of China keeps growing as a war of words on semiconductors with the U.S. escalates.

A joint venture between Qualcomm and China's Guizhou province, called Huaxintong Semiconductor Technology, has started the development of a new server chip based on ARM technology.

The joint venture is "now busy developing a customized server CPU product based on our technology and designs for the China market," said Derek Aberle, president at Qualcomm, according to a Seeking Alpha transcript of an earnings call last week.

Other companies are also developing custom chips for the Chinese server market.

Suzhou PowerCore is developing a CPU based on IBM's Power architecture, though the venture has raised security concerns. AMD has also created a joint venture to create Chinese x86 server chips.

Chipmakers are making a run at the Chinese market, which is considered a big opportunity for data center technologies. Like Facebook and Google in the U.S., Chinese companies like Alibaba and Tencent are establishing mega data centers for cloud and machine-learning services.

But the Chinese market has its quirks because companies there prefer to buy hardware from local vendors. It's partly because servers made by Chinese companies are cheaper and potentially come with fewer national security risks.

China's long-term goal is to be self reliant in the hardware market, with a majority of devices in the country running on homegrown components. The country already has the world's fastest supercomputer, TaihuLight.

A Chinese company called Tsinghua Unigroup, the majority of it state-owned, is building a US$30 billion chip factory and investing $4.3 billion in a city to serve the factory.

"The Chinese have been transparent about their desire to have a strong, indigenous semiconductor industry because they have spent so much importing this stuff," said Nathan Brookwood, principal analyst at Insight 64.

In 2014, the Chinese government said it would spend $150 billion over the next 10 years to grow its local semiconductor market. The U.S. has accused China of rigging the semiconductor market by giving an unfair advantage to Chinese chip companies.

Though Intel rules the China server chip market, Qualcomm is trying to push its chips, based on ARM architecture.

Qualcomm late last year announced its first 48-core server chip, the Centriq 2400. It is considered the best ARM server chip yet. But Intel has more than a 90 percent server chip market share, while ARM servers are virtually nonexistent and are still being tested. China represents a big opportunity to Qualcomm and ARM architecture to grow in the server market.

The Guizhou province is building up a reputation as a hub for big data, with many cloud server and telecom companies establishing data centers there. Making homegrown chips and servers will boost the region's economy and keep more workers employed.

Huaxintong Semiconductor Technology is a separate company from Qualcomm and developing its own CPU technology, a Qualcomm spokeswoman said in an email.

What the joint venture company is developing is unclear, but the technology could be based on the Falkor CPU core used in Centriq 2400.

Huaxintong Semiconductor Technology could take Qualcomm's technology and customize the CPU for local customers. It could strip out or add I/O and throughput technologies to directly address customer needs, Brookwood said.

Alternately, Huaxintong Semiconductor could create an ARM chip for high-performance computing by cramming many ARM CPU cores together, Brookwood said. That could allow the joint venture to create a chip to compete with Intel's Xeon Phi.

The server chip design will also depend on the software a customer uses. For now, the only proven software stack for ARM architecture is LAMP (Linux, Apache, MySQL, PHP) for web serving, but new usage models in areas like deep learning and high-performance computing are emerging every day.

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